
Energy Justice and Governance in Nigeria's Energy Transition
This report analyzes Nigeria's energy sector through the lens of energy justice, highlighting significant disparities in access, affordability, and the distribution of environmental burdens, particularly in the Niger Delta. It argues that for Nigeria's energy transition to be successful and equitable, it must integrate principles of procedural, distributive, and restorative justice, and makes key policy recommendations to achieve this.
Rethinking Energy Governance in Nigeria:
Is justice the missing link?
Presentation at FES/ Policy Alert / CoSET Roundtable on Integrating Labour Rights in Nigeria's Energy Transition; Lagos, October 10, 2024
Tijah Bolton-Akpan
Understanding energy justice
The Initiative for Energy Justice, defines it as “the goal of achieving equity in both the social and economic participation in the energy system, while also remediating social, economic, and health burdens on those historically harmed by the energy system."
Some energy justice themes include access, affordability, reliability, resilience, community participation, economic and workforce development, siting and land use, environmental and health effects, and public sector implementation.
Pillars of energy justice
Broad and meaningful participation in decision-making
Respect for divergent cultural and local knowledge
Equitable distribution of environmental benefits and burdens
Repair harm done to communities and the environment
Systemic change based on greater participation by all stakeholders
Many actions that promote energy justice, such as expanding economic benefits through renewable energy job creation in areas with high unemployment, encompass multiple pillars.
Global energy governance: Some fundamental premises
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Energy underpins nearly everything we do – and energy policy determines how energy is produced, distributed, and consumed, at community, organisational or governmental level
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Providing affordable, reliable, sustainable and clean energy is a development priority for us all (UN SDG 7) but this cannot happen without “energy justice”
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Climate change and the accompanying energy emergency is a class war! The owner and producer classes that "produced" the problem cannot produce the solutions!
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The ET is re-enacting historical global divisions of labour, and where a country is located in this divide determines its losses or gains from the transition
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It is estimated that energy accounts for more than two-thirds of total global GHG emissions. Therefore, to tackle the climate crisis, the global economy and national energy systems must be transformed based on “de-fossilization” and “to whom much is given”.
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Countries, communities, and people whose livelihoods are currently dependent on the extraction and production of fossil fuels will face significant changes as these industries shift
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For poor countries not to be left behind in ET, wealthy counterparts need to spend $$$Tr to develop solutions that both support just human development and protect the planet
Some Nigerian numbers, for context...
Over 60.5% of Nigerians in 2022 lacked access to electricity; Biomass accounts for about 80% of the total primary energy consumed in Nigeria
Only 16.8% of Nigerians in 2021 had access to clean cooking, with serious gender, health, and climate consequences!
The World Bank Doing Business report ranks Nigeria 187 out of 189 countries in terms of getting electricity to businesses
Combined bank lending to oil firms was N6.62tn as of Dec 2022; sector holds 21.21% of total NPLs! Yet lending rates keep rising (currently 17.01%).
The Big Number: More than 80 million Nigerians live on less than $1 a day and 130m multidimensionally poor!
Energy to pop ratio should be 1,000Mw to one million persons, yet Nigeria is 200 million people with 4000-5000MW
Despite 4 refineries (combined capacity of 10.7 mbpd), Nigeria still imports majority of refined petroleum products
Africa accounts for tiny share of global GHG emissions, at 3.8% in contrast to China 23%, US 19%, and EU 13%.
Average Nigerian emits less than 0.7mt of CO2 per year, compared with the EU's 6.4mts per capita and North America's 15.3mts
Installed power gen capacity is about 13Gw, with only 4-5Gw reaching end users, compared to 1,000Gw utility-scale for USA
Although industrialized countries are responsible for 60% of GHG emissions, developing countries suffer the worst effects of climate-related disasters.
Agriculture (37.99% of employment) is most vulnerable. Fossil energy sector employed only 8,693 persons in 2022 (NEITI 2023 OGA).
12 million residents of the Niger Delta's coastal communities are yet to be reached by the national grid. This is the region responsible for Nigeria's fossil energy exports!
About 43% of the population in the Niger Delta lives below the poverty line; the region has some of the worst social development indicators.
Global injustices in energy production and use
Nigeria energy use - 544Twh vs. USA 26,189Twh, S/Africa 1,348 Twh
Close to 50% of the world's population is poor ( < US$ 2.00 per day);
Bulk of poor rely on traditional biomass (estimated global total = 2.4 billion);
About 1.6 billion of the poor without electricity & clean/modern energy
Market-oriented reforms led by World Bank have adversely impacted on the poor
Resource-rich states are dominated by an energy export, low value-adding complex led by IOCs in bed with their own governments
Other Injustices
- Intergenerational injustice: fossil fuels as wealth held in trust for future gens; HCDTs 20% investment for “future spending”; indiscriminate spending of fossil revenues by sub-nationals; Nigeria has one of the largest populations of youth in the world & should prioritise intergenerational energy justice
- Legal injustices: Land Use Act of 1978, placed all lands including oil concessions in the trust of government; PIA as energy injustices reinforced - resource ownership vs justice; climate injustice; unjust terms for community beneficiation and environmental remediation (gas flare and energy loss; inter-governmental injustices -e.g. Until recently (2023 electricity Act) electricity was exclusive domain of FG and shortchanged states who could generate but could not transmit and distribute!
- Unjust state-investor relationships - JVs without technical knowledge; investor state treaties
- Injustice against communities - unserved and underserved communities; fenceline communities
- Ecological injustice: divestment; decommissioning and abandonment
- Energy sector labour injustices; casualisation, poor working conditions, risks etc
Nigeria energy transition ambitions
2060
Target year for carbon neutrality, focusing on 5 key sectors: Power, Cooking, Oil and Gas, Transport and Industry.
840k jobs
ETP plans to create up to 340k jobs by 2030 and up to 840k by 2060, mainly in Power, Cooking and Transport.
30Gw
Vision 30:30:30 aims to attain 30Gw of grid energy supply with a 30% RE mix by 2030.
$1.9Tn
Needed for ETP by 2060, with $410Bn (or $10bn annually) above BAU spending. Reaching 30:30:30 requires $18.7bn.
$2.78bn
Spent on servicing foreign debt in first seven months of 2024. Total public debt stood at N121.67tn in Q1 2024.
200tncf
Aims to exploit its 200tncf of gas potential as a bridge fuel.
Recommendations
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Nigeria requires more coherent implementation of climate and energy policy, development of a national strategy for technology transfer, more investments in climate-resilient infrastructure, and a quicker shift from fossils to renewable energy
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Broaden engagement with community-based organizations, NGOs, labour unions and other stakeholders in reviewing the Energy Transition Plan
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Financing opportunities must be made equitable to enable a just and equitable energy transition
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Avail affordable and reliable renewable energy technology to all, but especially for communities that have paid the price for fossil energy
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To be truly just, the ET must expand opportunities for women and youth
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Energy Transition Plan needs to be reviewed from the perspective of at-risk constituencies and communities
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Nigeria needs to be more effective at negotiations on climate and transition financing
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Nigeria and other African countries need to put debt on the climate and energy table. Debt cancellation, free from austerity conditions, is needed to give governments leg room to determine where freed-up resources are best allocated
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Ongoing power sector reforms (esp sub-national) needs to ring-fence financing for electrification of the poor
Thank you